January 19, 2018
The second week of the legislative session was shortened by the Martin Luther King, Jr. holiday.  Additionally, both the House and the Senate were pro forma on Friday, January 19 ; therefore, there was no committee or floor action that day either.
 
Committees continued to have informational hearings on many items.  There is generally still a significant amount of hall talk regarding the best path forward regarding the funding of K-12 education.  There is a growing sense that it will be extremely difficult to pass any sort of tax increase this year.  Therefore, legislators will have to find any additional money for K-12 or other projects from existing revenue sources.  There is still discussion regarding the potential for a constitutional amendment to attempt to resolve the K-12 funding issue. 
 
Some committees did begin to hold hearings on bills, but the schedule for committee hearings will likely pick up in the next few weeks.
KAIA Introduces Bill to Limit Work Comp Mod Increases
The Kansas Association of Insurance Agents (KAIA) introduced a bill that would limit the amount an employer's workers compensation experience modifier (mod) could be increased as a result of a motor vehicle accident (MVA) in which neither an employee of the employer nor the employer were at fault in the accident. This bill was precipitated by a particular situation which recently occurred, but there have been other similar situations that have occurred. The bill, HB2487, was introduced in House Insurance Committee. A hearing date is pending.
House Insurance Committee Receives Interim Report
The House Insurance committee received the Special Committee on Financial Institutions & Insurance's interim study report on minimum motor vehicle liability limits and setoff. The report, delivered by Kansas Legislative Research, outlined that interim committee's study relative to HB2104, which would prohibit an insurer from reducing the amount of underinsured motorist coverage available for a claim by any payment amount paid by anyone other than the insurer.  Also, the bill would increase the minimum bodily injury limit on motorist insurance policies from $50,000 to $100,000.  The interim committee made no recommendation to the House Insurance Committee.  In response the Chair of the Committee announced the formation of a subcommittee to further study HB2104 this session. They are set to meet this week.

Click here to read the interim report.
CAT Loss Bill has Hearing
House Insurance heard HB2469, a bill dealing with temporary claims facilities following catastrophic loss events.  The bill would allow insurance companies, after notifying the appropriate local units of government, to set up temporary claims facilities without the delay of complying with ordinances and/or procedures governing temporary business facilities. A representative from State Farm, the chief sponsor of the bill, and representatives from local units of government spoke in favor of the bill.  The KAIA supports the bill, but did not submit testimony.
Senate Committee Holds Hearing on Agent Licensure Bill
The Senate Financial Institutions and Insurance Committee held a hearing on SB268, a bill dealing with agent licensure, this week. The bill would allow the Insurance Commissioner to have access to expunged criminal history records to determine the qualifications to be an employee of or for licensure as an agent of the Insurance Department or the Office of Securities Commissioner.  This provision would apply to all applications for employment and licensure on and after July 1, 2018. The Kansas Insurance Department brought this bill forward to assist in their efforts to review the criminal background records of new applicants.  The Department was the only entity to testify and indicated that they want to determine if expunged records of applicants include convictions for financial crimes or crimes of dishonesty. The KAIA is monitoring this bill, which is expected to be considered for action by the Committee on Thursday.
Transportation Committees Hear from Experts on Autonomous Vehicles
The House and Senate Transportation Committees held hearings on the future policy impact of autonomous, or self-driving, vehicles.  The committees heard from experts from the automobile manufacturers, transportation safety and the insurance industry.  A representative from State Farm presented their perspective on the future of this technology and its impact on automobile insurance.
General Business Happenings
  • A bill was introduced this week that will restore the ability of small businesses to fully deduct expenses related to the purchase of business and office machinery and equipment.  Following the passage of tax cuts that exempted pass through entities from paying state income taxes in 2012, existing law allowing expensing was rendered moot and was deleted.  However, expensing was not restored when the legislature passed the retroactive repeal of the so-called small business exemption last year.  The legislation will retroactively reinstate business expensing for small businesses.  A hearing is tentatively set on the bill in Senate Tax on February 8 .
  • Also, the Senate Tax Committee had an informational hearing regarding whether utility companies were going to be lowering their rates with the tax savings many of those companies will see under the new federal tax code.  All of the utilities that are subject to federal income tax stated that they would be going through the KCC process to determine how much of a rate decrease they will be able to implement.
  • A bill, HB2491, was introduced this week that could impact appliance and electronics installation companies, homebuilders and the like.  The bill would require the collection of sales taxes on the installation of appliances and electronics in new construction and remodels.  We have been told that this bill was introduced in response to a recent Board of Tax Appeals decision.  There is much more to follow; but, we will continue to monitor.  The larger fear is that this opens the door to removing other sales tax exemptions, such as the exemption on professional services and agricultural machinery and equipment.
  • The relevant legislative committees dealing with business issues were relatively quiet this week.  The Commerce committees in the House and Senate received updates from the Department of Labor and Department of Commerce. Things will begin picking up in the coming weeks....

Kansas Association of Insurance Agents
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